I had written an article on Taxsutra examining the income-tax treatment of family arrangements effectuated through corporate vehicles. The article traced the doctrinal arc from the Kale immunity for family arrangements, as limited by the Mohota decision for corporate vehicles forming a part of family arrangement, and into the Income-tax Act, 2025, which carries forward the same architecture without a safe harbour.
Following up on that, this carousel summarises the key principles and the four structuring pathways:
1. Scheme of arrangement under S. 230-232 involving mergers/ demergers with nominal consideration
2. Inter se transfer of shares/ interests between each family branch 3. Capital reduction under S. 66 – either with or without consideration
4. Selective dilution through rights issue or buyback